NorthStar Realty Closes $865M Manufactured Housing Deal

NorthStar Realty Closes $865M Manufactured Housing Deal


NorthStar Realty Finance Corp.closed on the acquisition of a manufactured housing portfolio comprised of 71 communities containing approximately 17,000 pad rental sites located throughout five states (primarily in Florida and Salt Lake City, Utah) for an aggregate purchase price of $865 million, inclusive of all costs, escrows and reserves. NorthStar financed this transaction with a $640 million non-recourse, 10-year mortgage with a fixed interest rate of 4.02 percent. NorthStar expects to earn an initial current yield of approximately 14 percent on its equity investment.

David Hamamoto , chairman and chief executive officer, commented "We are extremely pleased with the acquisition of a second large portfolio in a sector of commercial real estate which has consistently demonstrated stable cash flows, steady rental growth, very low turn-over rates and minimal capital expenditures. Given the portfolio's strong cash flow characteristics and our long-term, low-cost financing, we expect to generate attractive risk adjusted returns and substantial gross dollar profits on this portfolio."

In other company news, last week the REIT priced an underwritten public offering of $175 million of its 8.50 percent Series D Preferred Stock with a liquidation preference of $25 per share. The company has granted the underwriters a 30-day option to purchase up to an additional $26.25 million of its Series D Preferred Stock solely to cover over-allotments, if any. The offering is expected to close on April 10, 2013.

Citigroup and UBS Investment Bank are acting as the joint book-running managers of the offering. Barclays, Deutsche Bank SecuritiesJ.P. Morgan and Keefe, Bruyette & Woods are acting as the joint-lead managers of the offering and FBR, JMP SecuritiesMLV & Co. and Sterne Agee are acting as the co-managers of the offering.

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